As you prepare to leap back into normal life, be sure to consider your full financial picture as well as long-term and short-term goals. Here are some forward-thinking money moves to make as you adjust to post-pandemic life.
Review and adjust your budget. Pandemic times required their own budget, as people cut down on costs like dining out and updating work wardrobes, but spent more on things like at-home entertainment. Others may have had to adjust their spending to fit a changed income level or to help them coast during a stint of unemployment. The pandemic may have also shifted something in some people’s mental list of needs and wants, as they found they can live with a lot less than they had believed.
As you adjust to post-pandemic life, take some time to review and tweak your monthly budget. Be sure to incorporate any changes in income, as well as a readjustment to pre-pandemic spending or changed priorities. You may need to review and adjust your budget every few months until you find a working balance.
Rebuild your savings. If you are one of the many Americans who were forced to dip into savings during the pandemic, create a plan to get your savings back on track. Tighten up your spending in one area until you’ve built up an emergency fund that can keep you going for 3-6 months without an income. Once your emergency fund is up and running again, continue to practice basic saving habits, such as setting aside 20% of your monthly income for savings. If the pandemic taught us anything, it’s that it’s always best to be prepared, because you never know what can happen.
Rethink your long-term and short-term financial goals. The pandemic has prompted many people to reevaluate their goals. Retiring before you hit 55 or taking a two week vacation next summer may not be as important to you as you had originally believed; or it may be even more important now. Similarly, you may realize your family has outgrown its living space and that moving to a new home is your number one financial priority. Take some time to rethink your long-term and short-term financial goals, and adjust your savings and budget accordingly.
Spend with caution. It’s perfectly fine to enjoy a shopping spree in celebration of a return to pre-pandemic norms, but it’s best to spend with caution. First, prepare to encounter inflated prices wherever you go. Gas prices have jumped recently, and costs of many consumer goods have spiked as well. If you planned to purchase a big-ticket item like an all-inclusive vacation or tickets for a cruise, consider waiting it out a bit until prices drop again.
The restaurants and movie theaters are open for business again, and mask mandates are dropping all over the country. As life returns to pre-pandemic norms, be sure to consider the state of your finances and to make responsible, forward-thinking money moves.
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